Lloyds Banking Group has come within a whisper of trading at £1.00 in recent sessions, posting a high of 95.861p.
So, will one of the UKs most widely traded and owned shares be able to reach the round number, and what would it take to get it there?
Lloyds has comfortably outperformed the FTSE 100 so far this year. Its shares have risen by 65.30% as of the time of writing, compared to a +16.71% gain for the blue-chip index.
Over 52 weeks, Lloyds’ stock has beaten all of the large UK banks apart from Standard Chartered, whose +69.50% gains eclipse the +61.00% per cent gain at Lloyds.
Lloyds Banking is integral to parts of the UK economy, for example, the bank processes1 in 4 card payments made in the country, and it’s also the largest mortgage lender in Britain, with a 20.0% market share, lending some £47.0 billion to homeowners in 2024.
That’s the good news.
The bad news is that once again the Bank’s past conduct has come back to haunt it once more.
This time it’s the payment of undisclosed commissions, to car dealers, who arranged motor finance for their customers, through Lloyds Bank and its subsidiaries.
Lloyds isn’t alone in this. Santander, Close Brothers and the finance arms of several motor manufacturers are also implicated.
However, because Lloyds was a very active lender in the space, it now faces the very real possibility of paying compensation to car owners, who used Lloyds finance to buy their vehicle .
The FCA, the courts and the lenders are still wrangling about the size of the compensation and the time scale for payments. Lloyds was sufficiently concerned to make a further £800 million provision against them. Which meant that Q3 2025 profits were down by around -33.0%. when compared to Q3 2024.
For now at least the Bank England isn’t cutting UK base rates further, and that should help Lloyds earnings going forward.
The Chancellor of the Exchequer is alsoreported to have ruled out a further levy or surcharge on bank profits as part of her late November Budget. If the UK budget on November 26th isn’t as unfriendly as it’s been painted, then we might see a relief rally in UK equities.
And, given that Lloyds Banking shares have posted 14 new highs over the last month, it seems plausible that they could test to £1.00 under those circumstances.
However, without that, we may have to wait for a favourable resolution in the Auto finance scandal, to act as positive catalyst for the share price.
